Microsoft tweaks its policy to engage with B2B technology start-ups

To work only with mature B2B firms, provide them access to sales network

To step up its engagement with start-ups, Microsoft plans to push its Cloud platform Azure across the world. The start-ups will get access to the technology giant’s vast sales, mentorship, and advisory support, which will cut down expenses they would have made in setting up own sales engine in markets they target.

According to its renewed strategy, the Redmond-headquartered company will work only with technology start-ups that are into business to business (B2B) space and have reached a certain level of maturity with a clear objective and revenue stream, and are backed by investors.

Microsoft is launching this programme across eight cities — Bengaluru, Seattle, Berlin, London, Beijing, Shanghai, Tel Aviv, and Sydney.

One of the criterion to be part of the company’s ‘Scale-Up’ programme is that a start-up should have at least raised series A funding, and must be generating revenues. This is a huge shift from the company’s strategy wherein it was working with entrepreneurs even during the ideation stage, through its ‘accelerator’ programme.

One of the pioneers among global firms to drive entrepreneurial ecosystem in the country, Microsoft’s earlier start-up engagement was driven by a ‘catch them young’ approach. The company has been the launch pad for many successful start-ups across the world.

In India, Microsoft’s around 150 start-ups such as Udaan, HealthifyMe, and CloudCherry have been successfully incubated and supported under its accelerator programme. 

“In the past, we had Microsoft Accelerator, which was more of a mentoring programme and the focus was about building entrepreneurial ecosystem and support them. But if you look at the Indian start-up ecosystems today, we have tonnes of accelerators and incubators, which means you really need to step up to figure out how do you try and get more and more unicorns,” said Lathika S Pai, country head at Microsoft for start-ups, MENA and SAARC region.

“Thus, we felt if we are able to go deeper with a few and catch them, we will be able to get the next unicorns,” she said.

Some of the Indian unicorns such as Flipkart, Ola, and InMobi are already using Microsoft Azure Cloud platform. The next level of growth for Azure will come when these B2B start-ups, who have the potential to become a unicorn, start using Microsoft’s Cloud platform. This could also have a chain effect as they also sell to enterprises globally.

While Microsoft, which fiercely competes with players such as AWS and Alibaba in the Cloud space, is in the process of shortlisting the candidates for the programme, it is preparing the backend process ready. The most exciting part of the programme is going to be the “Co-sell motion”, which means the start-ups part of this programme can leverage Microsoft’s sales network to get into newer markets.

To facilitate this, Microsoft has developed an online marketplace for the selected tech start-ups, which makes them easier to get discovered by the perspective clients using its search engine. The sale leads thus either come to the respective start-ups or even to Microsoft, which then pass onto to others.

“This is a huge benefit for the start-ups who are still in the early stage as it would save them a lot towards setting up the direct sales presence in those markets. Instead, they can focus on their core areas which is working on the product development and take it to the next level,” she said.